Tax Tips Blog Posts

  • Top Tax Preparation Mistakes A Small Business Makes

    July 15, 2019

    Top Tax Preparation Mistakes A Small Business Makes

    Top Tax Preparation Mistakes A Small Business Makes

    Tax season is already a stressful time for most small business owners. Throw in some easily avoidable mistakes and it becomes a full-time headache. Overpayments, lack of tax knowledge, and costly penalties add unnecessary stress to small business owners which can lead to paying more than needed.

    From accounting blunders to paperwork nightmares, small businesses can make a variety of mistakes. These can lead to not only overpaying and unnecessary penalties, but can actually leave money on the table. Every year, countless deductions are missed simply because most small business owners don’t know they exist.

    Hiring a CPA can help clarify what your tax obligations are, where you’re losing money, and how to maximize tax season instead of fearing it.

    CPA Can Help You Avoid These Tax Filing Mistakes

    The U.S. Tax Code is over 74,000 pages. There are volumes of the possible mistakes small business owners can make. While it’s not expected that small business owners know these pages, a good CPA will make them work for you. A few of the more common tax filing mistakes a CPA can help you avoid are:

    • Mixing Personal & Business Expenses - Personal expenses can’t be deducted if they’re not business expenses. Mixing the two can lead to extra confusion and time wasted.
    • Taxable Income - The IRS is not forgiving when it comes to taxable income. If you’re not sure what counts as taxable income, you could open your business up to an unwelcome audit.
    • Business Tax Obligations - If you’re not sure what your tax obligations are, you’re playing a risky game. A CPA can help clarify what your obligations are to prevent any surprises in the future.

    Professional Business Tax Services In Ohio

    If you’re a small business in Ohio, you should know that you may qualify for up to a 75% tax deduction on the first $250,000 of business income. Do you qualify? Our expert CPAs at BIG Financial know the Ohio tax laws inside and out and can find the deductions your business needs.

    At BIG, we are consistently ranked as one of the top CPA & Tax Accounting firms in North Royalton and Cleveland. We offer a variety of services for small businesses including strategic business planning, business financing, and business mentoring. If you need reliability and experience, you’ll find it at BIG.

    Save BIG by avoiding these key tax preparation mistakes.

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  • What is a Tax Consultant? Why Do Businesses Need One?

    June 17, 2019

    What is a Tax Consultant? Why Do Businesses Need One?

    What is a Tax Consultant? Why Do Businesses Need One?

    “Do I need a tax consultant?”

    That’s one of the most common questions we hear. While we could give you a simple “yes” and move on, let’s put this in perspective. The actual size of the U.S. tax code is 2,600 pages long, but with accompanying explanations and all past tax statutes, that number is pushed north of 70,000 pages.

    Those 70,000+ pages hold the tax breaks that your business needs. We don’t expect you to know where to find every single tax break in those pages, but a professional tax advisor would. In addition to that, you’ll be saving money at tax time without pulling out the records to do it yourself. And if you’re one of the unlucky ones to be audited, you can put your mind at ease knowing you’ve got a professional on your side.

    While having a tax consultant is in your best interest, there are a few strategies you can implement to help your business.

    Top Tax Consulting Strategies For Businesses

    Want to take proactive steps that can maximize your deductions? While a tax consultant can get you every deduction possible, here are a few strategies you can use to get started:

    • Keep Your Records Organized -- clean books and detailed supporting documentation will ensure you take advantage of all tax incentives and avoid late filing penalties.
    • Hire Independent Contractors -- You can exclude them from your employment costs, such as Social Security and Medicare taxes, company retirement plans, and other employee benefits such as medical, life and disability insurance, and vacation or holiday benefits.
    • File Your Taxes on Time -- Penalties can come in a variety of forms depending on your entity. Filing your taxes on time can help you avoid these.

    Tax Consultancy Services & Tax Return Filing With CPA

    At BIG, we can help navigate the choices of proper expensing of items, how to legally minimize your tax obligation, and help you to implement proactive tax reduction strategies as the business grows.

    We can also file all required tax returns, business, personal, employer, sales tax, and CAT. When you work with BIG, you are the direct beneficiary of more than 25 years of experience in dealing with difficult business issues from all perspectives. Our professionals have been where you are, as employees and C-level managers, business owners, and consultants, and we understand your position. That helps us put ourselves in your shoes and make the most out of your deductions.

    Save big this tax season with professional tax consultants.

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  • Tax Filing With A CPA Has Huge Benefits For Small Businesses

    May 15, 2019

    Tax Filing With A CPA Has Huge Benefits For Small Businesses

    Tax Filing With A CPA Has Huge Benefits For Small Businesses

    As your business grows, simply “balancing the books” no longer does the trick. In fact, you could make mistakes that not only cost you this tax season, but can affect the next few years as well. Hiring a CPA to file your taxes has huge benefits for your small business whether you’re in the start-up phase or an established business.

    Don’t make the mistake of just hiring a friend or local accounting guy. CPAs have the background, experience, and training to make your money work for you. They are experts in areas that directly impact your business. They know how to perform research and analysis of your finances to find the best tax breaks based on their extensive ongoing training.

    Advantages Of Using CPA Tax Experts

    CPAs can bring massive tax benefits to your small business. A few of the more popular include:

    • Expense deductions - CPAs help you examine your expenses, discovering ways to save money and find deductions that you might have otherwise missed.
    • Maximize profits - CPAs can look over your yearly expenses and find areas where you may be overpaying and how you can turn that into a profit.
    • Income reporting - Failure to report revenue can lead to trouble with the IRS. CPAs will help you find hidden revenue so that you can avoid fees and penalties.

    CPA Services For Small Businesses

    BIG can ease the burden and increase the chances of success of your start-up by helping with the accounting, operational, strategic planning and tax areas of your new and existing business. Several of our experienced CPAs have also been small business owners themselves. That gives them added insight and experience that is invaluable to any small business owner.

    If you’re looking to maximize your deductions while eliminating costly fees and penalties, our experienced CPAs can help.

    Trust the CPAs with BIG to maximize your deductions and eliminate costly fees this year.

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  • Tax Preparation Tips For Small Business

    April 14, 2019

    Tax Preparation Tips For Small Business

    Tax Preparation Tips For Small Business

    Tax preparation can be difficult for many small businesses. Between day-to-day operations, marketing your product, growing your team, and customer service, tax prep is the last thing on your mind. Finding time can be hard, but knowing a few tips can make tax preparation a much easier endeavor.

    To keep it simple, we’ve organized these helpful tips into five easy-to-follow steps. That way regardless of how what issues your business throws at you, tax preparation won’t be one of them. Keep reading to discover the five simple steps that will simplify tax prep and allow you to focus on the more important parts of your business.

    Tax Filing Tips To Prepare Businesses

    Tax filing doesn’t have to be hard with these five tips:

    • Get organized. By making quarterly tax payments, separating your accounts, keeping receipts, and keeping detailed notes, tax time becomes much less time-consuming.
    • Technology makes life easier. By using technology to digitize receipts and utilizing tax software, it cuts down on the paperwork and keeps everything organized.
    • Seek a pro. While you could search for hours on a particular topic, it’s easier just to hire a professional. You’ll end up saving money in the long run and won’t run the risk of messing anything up.
    • Ask questions. The more you know, the better. If you’re hiring a professional, make sure you understand how taxes affect your business and what you can do going forward.
    • Stay up-to-date. By keeping up with current sources and following similar businesses, you can continually learn which will make every year a little easier.

    Tax Preparation Services With BIG

    While these tips will take you far, professional tax preparation services can help maximize your deductions this tax season. With BIG, you’ll have access to one of the highest ranked CPA & Tax Accounting firms in the entire Cleveland area.

    Whether you’re a small business, start-up, or even an individual, we can help. Our experienced CPAs have years of experience and many of even run their own businesses. Our professionals have been where you are, as employees and C-level managers, business owners, and consultants, and we understand your position. We pair this with detailed operational and technical knowledge for a multi-dimensional approach that solves problems from all angles.

    Tax preparation can be a breeze by using these tips. For everything else, BIG is there for you.

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  • Professional Accounting Costs Less Than Doing It Yourself

    April 30, 2018

    Professional Accounting Costs Less Than Doing It Yourself

    Are you planning doing your own accounting this year? You’re probably giving away more money than you should. Doing your own accounting may seem like the cheapest option, but hiring a professional accounting service will actually cost less. One of the biggest mistakes both individuals and small businesses make is to take on their own accounting. This can lead to a lot of missed opportunities and deductions. You’re also more likely to make a mistake that could lead to further problems. By taking advantage of accounting services, you’ll have access to tax consulting, accounting analysis, and several other services that can save you thousands.

    Tax Consulting

    Tax consulting can help minimize several pain points you’d experience by doing your accounting yourself. Expert accountants can help create long-term tax strategies as well as filing all required tax returns, business, personal, employer, sales tax, and CAT forms. Tax consulting is more than just filing the paperwork for you. We’ll also work with you and teach you:

    • How to properly expense items
    • How to legally minimize your tax obligation
    • How to implement proactive tax reduction strategies

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  • What Your Family Business Should Know For Tax Season

    April 16, 2018

    family business taxes

    Employing family members can be a rewarding experience for business owners. With tax season underway, some questions are hard to answer. What forms do I have to file for my kids? Do I need separate forms for family and non-family employees? What if my spouse works with me? These are all great questions and often have situational answers. For instance, your children will have different tax requirements than other employees that are minors. Children also have different tax needs based on whether your family business is a corporation. To help simplify some of the confusion, here are a couple requirements for both children and other family members to help you during tax season.

    Employing Your Children

    For most small business owners, children are an invaluable part of the business. They can provide much-needed help during busy times and are more likely to be productive employees than other minors. While some children do work for free, there are a few things you need to know for those that are paid.

    • Federal unemployment tax is not required on the wages of your children.
    • Social security and Medicare (FICA) taxes are only required if the business is not a corporation.
    • You are required to withhold income taxes from your children’s wages.

    Employing Adult Family Members

    Children aren’t the only family members in a family business. Siblings and parents are often staples of a family business and are usually more loyal to the business than traditional employees. If you pay wages to any family member, make sure you know these key points.

    • Each family member needs a W-4 when hired and you are required to withhold federal income taxes.
    • Family member pay should be included in your unemployment tax.
    • Overtime works the same as a regular employee; One and a half times base pay after forty hours.

    Employing family members is a great route for many small business owners. BIG can help make your family business’ taxes a breeze with our small business accounting services.

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  • What You Need To Know About A 1099 Form

    March 15, 2018

    What You Need to Know About A 1099 Form

    Do you work as a freelancer or independent contractor? Chances are you’ll receive a 1099 form. If you make more than $600 with a client, they are required to send you a 1099 form by the end of January. Instead of of receiving a typical W-2 that traditional employees receive, most freelancers will receive the 1099-MISC form that is used to confirm that all their earnings are reported to the IRS.

    While this can be overwhelming for new freelancers and independent contractors, a little organization can go a long way. Proper organization allows you to maximize your tax write-offs and keep more of your earnings. Deductions such as car expenses and home office deductions are a couple of the biggest tax breaks you can get.

    Car Expenses

    Car expenses including mileage can provide one of the biggest tax write-offs for freelancers. The easiest method to use is to claim the standard mileage rate. This allows you to write off 54 cents off every mile you drive for business-related purposes. These miles include:

    • Driving while working
    • Going to meet clients at a seperate location
    • Heading out of town on business

    The standard mileage rate takes into account gas, insurance, maintenance, depreciation, and insurance. While you can use the actual method of deducting your car expenses, the standard mileage rate is far easier to track and report.

    Home Office Expenses

    If you’re running an independent business from your home, you can potentially write off part of your home expenses. As long as you have a dedicated space that serves as your primary place of business and is used exclusively for work, you can use it as a tax write-off. Using the simplified method is the easiest way to deduct your home office. It includes everything in your home office and can be figured out by finding the square footage of your home office. Here are a few things you need to know:

    • You can deduct $5 per square foot.
    • You can only deduct up to 300 square feet per year.
    • Total deduction cannot exceed $1500.

    Make sure you don’t miss out on any deductions. BIG offers professional tax services to make sure you get the most tax write-offs possible.

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  • How To Avoid Tax Identity Theft

    February 28, 2018

    Tax identity theft is frequently the single biggest type of identity theft according to the Federal Trade Commision. Finding out you’re a victim of tax identity theft can be a nerve-racking experience. By the time you learn you’re a victim, it’s usually too late. At that point, your options are slim and usually limited to preventing future damage.

    The best approach is to take preventative measures and avoid identity theft altogether. While there are multiple methods to be proactive, you can make the biggest impact by protecting your identity and avoiding scams. These two approaches will limit the exposure of your personal information to unauthorized eyes and dramatically lower your risk.

    Protect Your Personal Information

    Information such as your Social Security number, birth date, and other personal information should be protected at all times. The only types of people that should see this information are banking institutions, tax advisors, lending companies, and similar businesses. These types of institutions are mindful on how they ask for personal information as well. They will never have you send your SSN through email or any other unsecure method.

    In addition to only giving personal information to certain types of people, here are a few more tips that will help keep you safe:

    • Don’t carry your Social Security card with you
    • Regularly change your passwords online

    • Keep your firewall and antivirus on your computer installed and up-to-date

    Avoiding Scams

    As we move deeper into the digital age, scammers are more creative and deceitful than ever. Their scams are becoming more elaborate and harder to detect. Many tax identity theft victims unknowingly give away their personal information without knowing they are dealing with a fraudster.

    Most victims willingly give their information when they receive threatening phone calls, emails, or postal mail claiming the IRS will take some type of action if the victim doesn’t cooperate. Threats of foreclosure and jail time are usually enough to scare someone enough to send whatever information is requested.

    To avoid scams, there a few things the IRS recommends knowing:

    • You’ll never receive a call demanding immediate payment or any tax-related call from the IRS without first mailing you a bill. If you haven’t received the bill in the mail, be aware you could be dealing with a scam.

    • If you’ve completed your tax plan and don’t believe you owe any taxes, you can report any potential scam you encounter to the Treasury Inspector General for Tax Administration.

    • If you’re unsure on whether a person is who they claim, contact the institution directly and ask.

    Tax identity theft can be a scary situation if your caught in it. By protecting your personal information and being mindful of scams, you can greatly reduce your risk.

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  • Are There Home Office Tax Deductions?

    February 15, 2018

    According to a recent Gallup study, 43% of Americans report at least part of their time working from home. With more employees making the transition to home offices, the question inevitably comes up; What can I deduct?

    The IRS has two requirements that need to be met in order to claim the home office deduction. The first requirement is the space you intend to claim needs to be used as a home office regularly and excessively. The second is your home office has to be the principal place of your business.

    Regular and Exclusive Use

    The IRS is very particular about this portion. You must use your home office frequently for it to be considered eligible. This means that if you use your laptop on the couch, kitchen table, and the bedroom, you’re not eligible for the home office deduction. To keep your audit risk low, make sure your home office is:

    • An established place where you complete the majority of your work
    • Preferably a separate room that is designated for work only
    • A place where you work for a minimum of 12 hours a week

    Principal Place of Your Business

    Flexibility is a benefit here when it comes to your home office. The IRS is fairly understanding to the location of your home office as long as it’s used primarily for work. That means your garage, a corner of the living room, or a spare bedroom can all be used as a home office. To take advantage of the home office deduction, here are a few things you should know:

    • Choosing the simplified home office deduction allows you to allocate a percentage of your home as your home office.
    • Separate stand-alone buildings can be deducted if they are used primarily for business purposes.
    • Your home office should not be a communal area such as a family computer room.

    Follow these two guidelines and you’ll be well on your way to claiming your home office tax deduction. To help maximize your deductions, BIG can help you get the most back with our tax preparation services.

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  • 2018 Tax Plan is Helping Freelancers

    January 29, 2018

    freelancers get tax boost in 2018

    Freelancers are getting a big help from the new tax plan's pass-through deduction.

    You may not realize you are doing this as a freelancer, but you are.  If you end up claiming the revenue your LLC or S-Corp makes as your income and use itemized deductions to lower your taxes owned then you are participating in the pass-through deduction.

    This pass-through provision will allow you / freelancers to deduct 20% of your revenue from your taxable income.

    With the new law it has loosened restrictions so that not only the rich will benefit. You will get a nice savings as well.

    This deduction, paired with new, lower tax rates means most freelancers will pay less in federal taxes in 2018 than they would have under the former tax code.

    Read More here for more details:

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